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TMI Blog2016 (5) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... their distillery unit, so as to manufacture the taxable output being denatured spirit/alcohol. There is no dispute that the assessee have not received the services and paid the service tax on the said services. Further, I hold that expenses incurred by the appellant for procurement of inputs, is eligible input service as defined in Rule 2(l)(ii) of CCR, 2004. Accordingly, it is found that the ld. Commissioner (Appeals) have erred in observing that the service provider have only obtained the permit to procure molasses but not the molasses which is the actual raw material. Accordingly, the impugned order is set aside. - Decided in favour of appellant with consequential benefit - S.T. Appeal Nos.50716,50717/15 - Final Order Nos. A/70115-7011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ned order, was pleased to reject the appeal observing that from the scope of working in the agreement between the parties, it is apparent that service providers were appointed for performing liason works for the appellant to get allotment of molasses from the office of the Excise Commissioner and Controller of Molasses, Allahabad. The service of liason work provided by the said service providers to the appellant is not a taxable activity under service tax net. It was also observed that the so called contract for the liaisoning work for procurement of molasses at a consideration of ₹ 36/Rs.30 by Quintal appears to be speed money in the garb of commission/fee for liaising work. Being aggrieved the appellant is before this Tribunal. 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied in the order, and the occupier shall, notwithstanding any contract, comply with the order. Further Section 8 that (1-a) provides - Notwithstanding anything contained in Sub-Section (1) the occupier of a sugar factory shall sell or supply forty per cent of the molasses produced in each quarter of a molasses year in the sugar factory to such chemical industries which are actual users of molasses and are granted licence under the united Provinces Excise Act, 1910. It is further provided that such quantum of molasses as is not required by the said chemical industries may be sold or supplied by the occupier of the sugar factory to any other unit which is actual users of molasses with the prior approval of the Controller. Further from the Utt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounsel stated that from the provisions of the State Govt. Act and Rules for molasses, it is evident that even the appellant cannot transfer the molasses from their sugar mill to the distillery unit without the appropriate order and permission from the Controller of molasses. As a whole process is tedious, time-consuming, they have appointed liason agent for assisting the appellant in procuring the molasses required for their distillery unit for manufacture of taxable products, namely, denatured spirit. It is further evident from the bill of the service provider, they are registered with the Service Tax Department and have charged service tax on the service amount as agreed and accordingly, the appellants have rightly taken the Cenvat credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... garettes and further it was held that it is not necessary that the farmer should sell entire produce out of cloned saplings bought from appellant to the appellant alone. It was further held that such services are covered as input service and Cenvat credit is admissible. The appellant further relies on the ruling of SMB Bench of this Tribunal in the case of VST Industries Ltd. Vs. CCE, , CE ST (Appeal II), Hyderabad : 2013 (31) STR 357 (Tri.-Bangalore) wherein the assessee being a manufacturer of cigarette, had availed input service in the nature of advice to farmers to grow good quality of tobacco. Cost of such services were included in cost of production by the assessee. It was held that services are provided to farmers on behalf of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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